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Optimism over Italian Prime Minister
Silvio Berlusconi's resignation pledge
has seemingly faded overnight, with U.S. stocks headed lower in
pre-market action. Amid the uncertainty over Italy's future
leadership -- and in the wake of a notable margin-call hike on
Italian debt -- bond holders hit the proverbial exits
en masse
, sending 10-year yields to a euro-era high of 7.4%. Typically,
borrowing rates above 7% are considered to be unsustainable over
the long term. Against this backdrop, and thanks to re-emerging
fears of fiscal contagion, the Dow Jones Industrial Average (DJIA)
and its U.S. comrades are set to follow European stocks into the
red.

In equities news, Adobe Systems (ADBE - 30.42) last night
announced restructuring measures to better focus on its digital
media and marketing software. As a result, the firm expects to cut
750 jobs, and predicted revenue growth of 4% to 6% next year.
Analysts, on average, were calling for full-year growth of around
9%. Furthermore, ADBE trimmed its unadjusted quarterly earnings
outlook to a range of 30 cents to 38 cents per share, compared to
its previous guidance for a per-share profit of 41 cents to 50
cents. At last check, ADBE is set to start the session with a 10.6%
drop.

In earnings news,
Weight Watchers International
(WTW - 71.84) last night reported a third-quarter profit of $80.7
million, or $1.09 per share - up 82% from last year's profit of
$44.4 million, or 59 cents per share. Revenue was also on the rise,
increasing 29.6% to $428.4 million. WTW continued its recent
history of besting expectations, as analysts, on average, were
projecting a profit of 94 cents per share on revenue of $411
million. Looking ahead, WTW upped its 2011 fiscal guidance for the
third time this year, and now expects earnings in the range of
$4.05 to $4.10 per share. Analysts, meanwhile, are predicting
earnings of $3.98 per share. In pre-market trading, WTW has shed
8.8%.

Meanwhile,
Activision Blizzard
(ATVI - 13.93) said its third-quarter profit nearly tripled to $148
million, or 13 cents per share, from last year's earnings of $51
million, or 4 cents per share. Excluding items, ATVI earned 7 cents
per share, while revenue increased 1.2% to $754 million. The video
game publisher's results toppled Wall Street's prediction for a
profit of 2 cents per share on $558.4 million in revenue. For the
current quarter, ATVI expects adjusted earnings of 55 cents per
share on $2.17 billion in sales, while analysts are looking for 53
cents per share on revenue of $2.10 billion. The Santa Monica,
Calif.-based company also raised its fiscal 2011 adjusted earnings
outlook to 85 cents per share on revenue of $4.25 billion.
Analysts, on average, are anticipating 79 cents per share in
earnings on $4.11 billion in sales. Ahead of the bell, ATVI is
lingering about 1.7% south of breakeven.

Finally, Caribou Coffee (CBOU - 14.41) reported a third-quarter
profit of $1.8 million, or 9 cents per share, up from $1.6 million,
or 8 cents per share, in the year-ago period. Excluding items, CBOU
earned $1.6 million, or 7 cents per share, compared to $1.0
million, or 5 cents per share, in year prior. Meanwhile, net sales
rose 16.1% to $81.4 million, boosted by a 4.1% increase in
same-store sales. Analysts, on average, were expecting a profit of
6 cents per share on revenue of $78.1 million. For fiscal 2011, the
company is expecting its adjusted profit to arrive near the top end
of its previously forecast range of 39 cents to 41 cents per share,
falling roughly in line with the consensus estimate of 41 cents per
share. At last look, CBOU is poised to open 2.3% lower.

Data on wholesale inventories is due out today, along with the
usual report on domestic petroleum supplies. Thursday brings a
relative onslaught of economic news, including import/export
prices, the U.S. trade balance, the Treasury budget, and the weekly
report on jobless claims. The week wraps up on Friday with the
Thomson Reuters/University of Michigan consumer sentiment survey
for early November.

Stocks in Asia caught a lift today, following suit with healthy
gains on Wall Street after Italian Prime Minister Berlusconi
announced his intention to resign
. Traders also cheered an encouraging round of inflation data out
of China, which showed that producer prices rose by a
tamer-than-forecast 5% in October. Easing inflation could give
policymakers some room to relax their tightening regime,
potentially averting the "hard landing" that many have feared for
the key emerging market. By the close, Hong Kong's Hang Seng added
1.7%, Japan's Nikkei rose 1.2%, China's Shanghai Composite tacked
on 0.8%, and South Korea's Kospi gained 0.2%.

Conversely, the major European benchmarks have turned south at
midday. The initial enthusiasm over Berlusconi's impending
departure has faded, thanks to soaring Italian bond yields. The
yield on 10-year notes spiked north of 7% today after clearing
house LCH.Clearnet upped the initial margin call on Italian debt by
3.5 to 5 percentage points across all bond maturities. At last
look, the German DAX is down 2.6%, the French CAC 40 is off 2.3%,
and London's FTSE 100 is 1.8% lower.

Currencies and Commodities

The greenback has reclaimed some ground this morning, with the
U.S. dollar up about 1.1% at last check. Elsewhere, crude futures
have pared some of their recent gains, with the front-month
contract down $1.16, or 1.2%, at $95.64 per barrel. Likewise, gold
futures have retreated from multi-week peaks, with the precious
metal last seen $7.40, or 0.4%, lower at $1,791.80 an ounce.

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